TDQ: Test your knowledge – Questions (June 2018 issue)
31 May 2018
Professional Paraplanner has teamed up with key training and exam support providers to help you in your training, development and qualifications.
Here are this month’s TDQ: Test Your Knowledge questions, published in the June 2018 issue of Professional Paraplanner.
These questions relate to examinable Tax year 17/18, examinable by the CII until 31 August 2018. These DO NOT relate to tax year 18/19 as this is not currently examined.
1. What benefits could a building society member expect in the event of demutualisation?
A. Lower interest rates on borrowings
B. Higher interest rates on savings
C. Increased product range
D. Cash or shares in the new company
2. Which of the following is regarded as a common danger specific to investing in offshore accounts?
A. Reduced compensation schemes
B. Interest rate risk
C. Higher taxation rates
D. Reinvestment risk
3. Madeline died on the 12th December 2015 leaving her entire estate to her husband John.John died on the 23rd November 2017. Their three children are acting as personal representatives and they want to know how long they have to make a claim for the transfer of Madeline’s unused nil rate band. You tell them they have/had until the:
A. 12th December 2017
B. 23rd November 2019
C. 5th April 2019
D. 30th November 2019
4. It is possible that certain individuals may be entitled to a higher lifetime allowance. Who would NOT qualify for this?
A. Non-UK residents.
B. All members of Public Service Schemes.
C. Those with benefits transferred in from a recognised overseas scheme.
D. Pre A-day divorcees, in receipt of a pension credit.
5. Sharon has made a request to make her life assurance policy ‘paid up’.In relation to the sum assured, which of the following statements is TRUE?
A. It stays at the current level for one year and then is reduced
B. It stays the same
C. It is reduced
D. It can be increased for a fee at the time of making it paid up
6. You are discussing the various risks that investors face with your new clients Toby and Emma. Emma asks you to explain to her what you mean by the term liquidity risk. You tell her it is the risk of:
A. the issuer of a security being unable to repay capital or interest
B. a new government changing fiscal policy
C. investors forced to sell a security at a price below its fair value
D. he value of sterling appreciating against a foreign currency
7. An investment manager has purchased £100,000 worth of AIM shares and £100,000 worth of direct shares.What is the stamp duty reserve tax on this purchase assuming both transactions were carried out electronically?
8. A Deputy was appointed by the Court of Protection to oversee David’s affairs after he had a serious motorbike accident – he has now recovered his mental capacity sufficiently to be able to manage his own affairs – what can he do?
A. Apply to the Court for a recovery order so he can manage his own affairs again
B. Nothing – deputyship continues throughout his life
C. Make a request to the Office of the Public Guardian for the Deputyship to be rescinded
D. Ask a Medical Practitioner to certify the Deputyship null and void
9. Percy has a lifetime mortgage with a capped rate of interest where he pays the interest, and wants to access additional funds. Assuming a climate of rising house prices, what trend would be preferable in his circumstances as regards interest rates?
A. Interest rates are irrelevant to Percy’s decision
B. Rates staying at the same level
C. Falling rates
D. Rising rates
10. Which of the following would be considered a real time promotion?
A. An advertisement
B. A brochure
C. A telephone conversation
D. A leaflet
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